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Democrats hope Culver will sign new tax plan

James Q. Lynch

Apr 15, 2009

DES MOINES - A plan Democrats say would reduce state income
taxes for most Iowans is clinging to life after they changed it to
win Gov. Chet Culver's support, according to House Speaker Pat
Murphy, D-Dubuque.

Murphy said Wednesday he has 50 votes - one short of a majority -
to pass House File 807, a plan to use the $505 million windfall
from ending federal deductibility to drive down state income tax
rates.

"We still do think we can get to 51 votes, so it's still a live
round," Murphy said dismissing comments by members of his
Democratic caucus the plan is dead. "Before the governor rewrote
it, we had 52. We are optimistic that we will pass it yet this
year."

Culver, who has repeatedly said he doesn't think raising taxes on
Iowans during a recession is good policy, sought changes to make
the plan benefit more Iowans. Originally, just shy of 50 percent of
Iowa income tax filers would have seen their taxes go down. After
Democrats raised standard deductions by about $1,000 and added a
$100 refundable college student tax credit the plan was a $54
million tax cut.

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Culver is working with Democratic legislative leaders to find the
votes to pass the tax bill, but a source close to those discussions
said that, in the end, it is their priority, not the
governor's.